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DATA & ANALYTICS

Data and Analytics: A New Toolkit for Asset Managers

Featuring highlights of the State Street 2013 Data and Analytics Survey

conducted by the Economist Intelligence Unit

DATA & ANALYTICS

2

34%

33%

33%

North America

Europe

Asia Pacific

About the Research

A global survey of more than 400 asset managers and institutional asset owners on investment data

and analytics, conducted by the Economist Intelligence Unit on behalf of State Street (August and

September 2013). The survey included 74 traditional asset managers (focused on equities or fixed

income strategies).

Respondents by Region Respondents by Type

Banks

Insurers

Pension Funds

Other

Diversified Asset Managers

Traditional Asset Managers

Alternative Asset Managers

Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit

11%

18%

20% 8%

8%

16%

19%

DATA & ANALYTICS

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Disruptive Industry Trends Require a Rethink of Data Strategies

Asset managers are redesigning their operating models and data

infrastructures in response to five forces of change

Strategic impact Data challenge

New standards on risk Investors and regulators demand

greater transparency

Integrated data analytics across more

complex portfolios

Outcome-based

investing

Benchmarks will be more personalized

around investor goals

Custom benchmarks require new data and

tools to measure performance

Regulatory complexity Increased reporting requirements in

multiple jurisdictions

Flexible reporting platforms; compliance

rules integrated into operational systems

Electronification of

trading

Decision-makers in front office need to

be able to act faster on investment

insights

Need for real-time data as well as better

order management and portfolio

optimization tools

Support for new

markets

Need broader insights to select

investments and ways to service local

needs

Systems that can adapt to meet local

market demands, while retaining benefits

of scale

DATA & ANALYTICS

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The Industry is Investing Heavily to Keep Pace


% Change In Investment into Data and Analytics Over Past Three Years

(Traditional asset manager respondents only)

11%

77%

12%

0%

0%

Significantly increased our investment (>20%)

Slightly increased our investment (1-20%)

Made no change

Slightly decreased our investment (1-20%)

Significantly decreased our investment (>20%)

DATA & ANALYTICS

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Investment is Targeted at Decision-Making in the Front Office

• Decision-support for the

front office becomes a

priority

• Need to move closer to real-

time information


How Investment Will Be Prioritized Across a Range of Data Tools


26%

42%

32%

22%

22%

57%

39%

41%

47%

35%

Portfolio optimization

Order Management Systems /Execution Management Systems

Benchmark data

Performance analytics

Risk analytics

Significant increase Slight increase

DATA & ANALYTICS

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Data and Analytics are Now a Firm Priority for Institutional Investors …


Data is the Key to Addressing a Wide Range of Strategic Concerns

• More than 9 out of 10 (93 percent)

institutional investors view data and

analytics as a high strategic priority

• For 35 percent, data and analytics is

the most important strategic priority

35%

58%

7%

0%

0%

It is the most important strategic priority

It is a high strategic priority (near the top)

It is a mid-level strategic priority

It is a low-level strategic priority (near the bottom)

It is not a strategic priority


DATA & ANALYTICS

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An Industry

Divided by Data

1. “Data Leaders” – Companies in the survey whose data and analytics are

already a source of competitive advantage

2. “Data Laggards” – Have yet to gain full benefit from their data

Data is a competitive asset … But few know how to use it

• 66 percent of traditional asset managers

believe data will be a key source of

competitive advantage in the future

• 88 percent increased investment in data

infrastructure in the past three years

• Only 23 percent of asset managers are

reaping the full benefits from their data and

analytics capabilities today

• Our research reveals that a capability gap

is opening up between data leaders and

data laggards


Yet the Industry is Polarized by Its Approach

DATA & ANALYTICS

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% confident in capability

X

• More likely to get distracted by the

complexity of data management

• Less likely to feel their data capabilities are

keeping pace with the growth of their

business

• Generating forward-looking insights

from data

• Integrating risk and performance analytics

• Optimizing their electronic trading strategies

50%

33%

92%

7%

Data Leaders are Better Prepared for the Challenges Ahead

53%

50%

43%

64%

72%

70%

Leaders Laggards

(All respondents) Data leaders are more confident in ...

% agree with statement By contrast, data laggards are …


(All respondents)

DATA & ANALYTICS

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63%

81%

Laggard

LeaderTools for regulatory compliance

Multi-asset class risk tools

Custom benchmarks/indices

% that view area as a strength

59%

70%

Laggard

Leader

38%

60%

Laggard

Leader


Data Leaders Have Smarter Tools for Managing Risk, Compliance

and Performance

(All respondents)

DATA & ANALYTICS

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Defining a New Service Model

Data Readily Available Adaptable Systems Smarter Insights

Challenge • Accuracy of information is

the top data challenge for

traditional asset managers

(cited by 43 percent)

• Systems must adapt to

support multiple

geographies, asset

classes and regulatory

regimes

• Only 18 percent of

traditional asset

managers have all of

the talent they need

to manage data

effectively

Solution • Trusted data providers

• Integrate data to achieve

“one version of the truth”

• Systems that support

global reporting

• Integrated view on risk

and performance

• New outsourcing

models focused on

insight as well as

cost

DATA & ANALYTICS

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In Summary: New toolkit for asset managers

Better risk and

performance analytics

• Asset managers moving into more customized solutions will need risk

and analytics tools with multi-asset class capabilities

Manage Regulation • Develop reporting systems with the flexibility to meet evolving

regulatory demands across multiple jurisdictions

Integrate Your Data • Traditional asset management firms need to invest in enterprise data

warehouses and better data governance

Accelerate Investment

Decisions

• Better, more accurate and timely data is key to making better

investment decisions and being able to act on these insights in real

time

Future-Proof Your

Systems

• Traditional asset managers need flexible systems that can adapt as

investment goals and strategies evolve

DATA & ANALYTICS

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strategies or tax and legal status, nor does it purport to be comprehensive or intended to replace the exercise of a clients own careful independent

review regarding any corresponding investment decision or review of our products and services prior to making any decision regarding their

utilization. This does not constitute investment, legal, or tax advice and is not a solicitation to for products or services or intended to constitute any

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direct or consequential, from or in connection with the use of this document and/or the information herein.

This document contains certain statements that may be deemed forward-looking statements, which are based on certain assumptions and

analyses made in light of experience and perception of historical trends, current conditions, expected future developments and other factors

believed appropriate in the circumstances.

© 2014 State Street Corporation CORP-0934

Il Salone del Risparmio - Presentation

Economy & Finance

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